Demand strong for office space at Sowwah Square

Abu Dhabi: Sowwah Square on Al Maryah Island, which is expected to become the heart of Abu Dhabi's new Central Business District (CBD), is slowly starting to fill up with new tenants, Mubadala Real Estate and Hospitality announced yesterday.

Currently, there are 33 leased clients for the development's office towers, eight of which are already occupying their rented space.

The development comprises four Grade ‘A' office towers totalling 180,000 square metres of commercial space, the new headquarters of the Abu Dhabi Securities Exchange (ADX), two hotels and 33,000 square metres of retail area, known as ‘The Galleria at Sowwah Square.'

The first tower of Sowwah Square was handed over in March last year and the remaining three towers were delivered in the first quarter of this year. Currently, over 80 per cent of the first tower (Al Sila) and 48 per cent of tower 3 (Al Maqam) are leased, Mubadala said.

"For tower 2, we're in negotiations for about 10 floors," Piers Barttelot, head of commercial leasing for Mubadala, said. "Tower 4 is open and operational, but we're basically putting tenants in the other three buildings first because what we want to do is create critical mass."

Creating critical mass

Barttelot said that dem-and has been good "because we've created critical mass and that really pulls in other people," adding that it's still difficult because the whole development is not yet realised. "They know that something like this will take till 2030 to deliver the entire thing. So they got to have vision. However, what we're providing is very self-contained well-managed offices."

"This will have a very positive knock-on impact for Abu Dhabi's and the UAE's economy," Ali Eid Al Mheiri, executive director of Mubadala Real Estate and Hospitality, said.

Space is leased starting from 200 square metres for a minimum of five years, Barttelot said.

Rents have not been quoted because every deal is different, he said. "If you come, say you want 200 square metres, we obviously have to split the floor for you," as opposed to a tenant who's looking to rent two or three floors, he said.

When asked about the challenges in the market, Barttelot said it's the global climate that makes it difficult to have somebody willing to commit to a period of five to 15 years. "People are much more cautious than they used to be… they're looking at the market and where they want to be."

As for the rest of the development, the Four Seasons Hotel Abu Dhabi is yet to be built while the Rosewood Abu Dhabi Hotel is expected to be ready by the end of this year.